New Research Shows High Bandwidth Online Services Create Demand for Faster, More Expensive, Broadband

BY CCIA Staff

September 5, 2013

Brussels – The Computer and Communications Industry Association (CCIA), the international organisation for the Internet industries, is today releasing two studies about the 21st century consumer and broadband. These precede the likely adoption of a Regulation on telecommunications by the European Commission next week.

First, a survey of 934 consumers in Italy, France and Germany confirms that the reason consumers pay for broadband is to access content, applications and services. Even more importantly for the telecommunications industry in Europe, the reason that consumers upgrade to a faster, more expensive, connection is to improve their Internet experience and to use high bandwidth services such as online video and TV.

The survey shows that consumers using higher bandwidth services are more likely to upgrade to a more expensive connection with 40 percent of those making video calls having upgraded in the past year and 49 percent of those uploading video. Overall, 31 percent of consumers polled would be willing to upgrade, but 39 percent of those who have already upgraded would be willing to upgrade further, demonstrating that faster speeds and use of high bandwidth services increase expectations and create a virtuous cycle.

Secondly, a study of consumer behaviour towards switching broadband providers shows that in most European countries consumers stay with their ISP for 10 years or more, with less than 10 percent changing providers annually. Moreover, the level of switching has reduced by half in the last 5 years, possibly due to the increase in bundled offers. In addition, 62 percent of EU27 consumers have never considered switching to another provider.

James Waterworth, Vice-President of CCIA said, “Consumers pay for broadband to access content and services online, not because it looks nice. Unfortunately, the market for broadband is not as dynamic as is imagined. Given that consumer switching (the churn rate) is down 50 percent in Europe in the last 5 years, and that 63 percent of EU consumers don’t know what speed they should be getting, consumers cannot effectively ‘police’ ISP behaviour with regard to blocking or prioritising online services.”

“The value of the Internet economy is so great that European policymakers need to act to guarantee an open Internet in the upcoming Regulation on a single market for telecommunications. Switching broadband providers is complicated if you take broadband, TV, mobile and fixed telephony from the same provider. The commercial market alone will not preserve an open Internet and BEREC analysis shows that hundreds of millions of Europeans have online services blocked.” Waterworth said.

The survey of consumers in Italy, France and Germany was conducted by ICM Research and the survey and analysis entitled ‘Consumer Lock-In for Fixed Broadband’ by Robert Kenny and Aileen Dennis of Communications Chambers.

Related Articles

Washington — Upon FCC Commissioner Brendan Carr’s announcement today of the 5G Upgrade Order, the following can be attributed to Computer & Communications Industry Association President Matt Schruers: “Recent events have shown that reliable networks are necessary for Americans to work and learn remotely. Upgrading to 5G networks is a critical step in building the…

Brussels, BELGIUM — The Organisation for Economic Co-operation & Development (OECD) launched the OECD Policy Observatory on AI. The Observatory is an online portal that will serve as a public education tool and resource for policymakers in the AI governance space. This builds upon prior efforts such as the OECD AI Principles released last May,…

Brussels, BELGIUM — The European Commission today released several documents setting out the EU’s policy approach on everything digital. The European Commission President also published an op-ed on “Shaping Europe’s digital future.” The White Paper on Artificial Intelligence released today sets out policy options on how to promote the uptake of AI while addressing the…